Archive for January, 2005

I let my friends check out my latest phone. They switched the ringtone from a song to a man shouting. They also turned the volume all of the way up. Someone rang me while I was driving. All of a sudden someone was shouting at me while I was driving. I didn’t wreck, but it did take two or three minutes for my breathing to return to normal.

Sorrent announced a licensing agreement with Twentieth Century Fox to bring Fox film content to mobile phones. The first movie will be Robot. Sorrent will release a mobile game at the same time that Vivendi releases the console title. Sorrent and Fox will partner on other films, and the partnership will go beyond games to include wallpaper, ringtones, film clips, etc.

The question is: is this marketing for the film? content that should be sold separately? or both? I think the answer is eventually both, but should be advertising dollars in the near term. Today, it is content to be licensed – at least in this deal. Fox will collect a fee on each download associated with their films.

I think this deal will work for Sorrent. Sorrent produces wonderful mobile games (my favorite is Zuma) and is likely to generate a positive return on their investment even though film-based games have not been the top sellers that reach the casual game player. Carriers are eager for new titles and likely to help market them.

Will be interesting to watch in the long term, however, to see if selling this content is more beneficial to the film industry than giving it away as pure marketing.

I was browsing some of my vacation photos on Ofoto. As I looked through the album, I noticed a new feature on the side of the web page. It showed my photograph on a mobile phone. I gave it a shot – entered my phone number and carrier. No luck – my carrier not supported yet. No note setting expectations on when it will be available.

I think it’s a sign of how nascent this market is and how low consumer expectations are. It’s like turning back the clock to the early days of the Internet. People didn’t mind so much if a link was broken – they just tried again another day. Guess I’ll give it a shot in another few months.

Philadelphia’s CIO (I didn’t know cities had those) announced that Philadelphia would complete their ambitious plan to cover 135 square miles with Wi-Fi. The project will offer free Internet access in public parks and discounted rates for low-income residents.

While the plan is a noble one and will offer a plethora of benefits to the residents of Philadelphia, I think it falls short of fully “bridging the digital divide” – which does exist. According to Jupiter’s numbers, about 2.5 million households with an annual income of $15,000 to $30,000 had broadband access in comparison to more than 12 million households earning in excess of $75,000 annually.

First, there is already a lot of free access in cities like Philadelphia and San Francisco. I can see nine access points from my flat, 43 at the nearest intersection, and three in the closest “garden” in Golden Gate Park near my home. Half of these are unencrypted.

Second, lack of computers in lower income families is an issue. Lower income households have access in public libraries, at school, etc., but not necessarily in their homes. Not only are computers expensive, but also a confusing and complicated purchase for a first time buyer. From this standpoint, organizations like Computers for Youth (www.cfy.org) based in New York are carrying the load in bridging this divide. Bridging this divide requires putting a computer in the home plus providing training and ongoing technical support.

Third, collecting payment is difficult even at a subsidized rate. Most ISP’s require credit cards – a barrier for lower income families. With Internet access being a “nice to have” service, these bills are less likely to be paid when there is a cash shortfall than heat or water. By giving up this segment, Verizon comes across as magnanimous, but it’s also likely a customer base they’d rather not serve.

Qualcomm which submitted one of four complete proposals for the 802.11n standard has decided to join the TGn Sync group giving more leverage to a group that already includes heavyweights such as Atheros, Intel, Nokia, Nortel, Panasonic, Philips, Samsung, Sanyo, Sharp, Sony and Toshiba. The question of whether the TGn Sync proposal or that of the Wwise group (Airgo, Bermai, Broadcom, Conexant, STMicroelectronics, and Texas Instruments) is technically better is open to debate with each proposal offering its advantages. The TGn Sync group, however, has lined up a number of consumer electronics companies on its side that strengthen their position. Streaming video over the wireless network will be one of the primary drivers of consumer upgrades to higher speed/higher capacity networks. Having the CE companies on their side early on, the TGn Sync group is well positioned to put forth a standard that takes into account stakeholders that are likely the largest consumers of Wi-Fi chips beyond basic home networking boxes. Adding Qualcomm to their side eliminates a detracting factor moving forward and will simply the process overall.

24 Hours – the thriller drama – aired it’ fifth episode of the 2005 season last night. While just one of many similar episodes, it highlighted many of the reasons why a cell phone is not a good idea if you’re a “bad guy” and brought ringtones to a prime time TV audience. A mother heard her recently murdered daughter’s phone ring and instantly identified the ringtone as being unique to her daughter – one that her daughter had recently paid for and downloaded. While the “bad guys” initially covered it up by claiming that they too had the same ring tone, it’s only a matter of time. Given the capabilities of CTU, it won’t be long before they identify all of the wireless subscribers with that specific ringtone and realize that the murdered girl’s phone was indeed on the premises.

Sprint has joined Verizon and Alltel in their decision at least to delay their decision to participate in the nationwide wireless 411 directory – a service which would allow consumers to opt-in to the service as opposed to paying to opt out like many landline services.

The service – to be offered by Qsent already faces a number of challenges beginning with the need for consumers to opt in rather than out and including recently passed legislation in California which requires the carriers to obtain written consent from the consumer before being allowed to include them in the list.

With ARPU’s flat, carriers are certainly in need of incremental revenue opportunities, but I don’t think they’ll find a big win in wireless directory services. Cost is one hurdle, but consumer interest is an even bigger one. Mobile phone numbers remain “guarded” by many individuals – a piece of personal information to which individuals like to control access. JupiterResearch shows that consumers are interested in Directory Services (411) – in fact these services top the list of productivity services that interest consumers -, but they are primarily interested in pizza delivery, tow trucks, and taxi’s – entities with landlines.

BMW has launched a promotional campaign on mobile phones testing a new medium, a medium to which many have access, but few – advertisers and consumers – use. There are nearly 160 million cellular subscribers in the U.S., but according to a recent JupiterResearch consumer survey, only six percent of online consumers have received an SMS from a business. Cellular phones are ubiquitous, but the majority of consumers are not comfortable with either the text messaging or WAP browsing features required to participate in this marketing campaign. BMW does indeed have a tech-savvy customer base more likely to understand how to download graphics to their phones, but this far from assures a great user experience.

Being both a wireless and an automotive enthusiast, I was anxious to try the experience. I dialed 703-286-BMW3 on my Nascar-branded Motorola phone operating on the Nextel network. Once I connected, I received a message that I would receive an SMS. An SMS arrived at my phone shortly thereafter. Embedded in the SMS was a URL with a link to the photo gallery. Unfortunately, my browser would not allow me to “highlight” and connect to the URL. I asked several of my colleagues around the office to do the same. A colleague on Sprint was able to connect – another on AT&T Wireless was not. The experience was “ok” – hard to scroll through a lot of text on the phone (and I had to keep reloading) and a rather small screen to be viewing such exciting content (it’s been six or seven years since the last major 3-series redesign). A novel experience though.

All in all, I think it’s a good play by BMW. The campaign probably cost little to produce, and the “ok” experience comes at a time when consumers do not have high expectations for multi-media experiences on their phones. It gives BMW an opportunity to test the mobile phone medium and learn from the experience. The mobile phone will grow in importance as a medium for advertisers. Early adopters (advertisers) may not see success as measured by traditional metrics, but the early lessons will give them invaluable experience once some of the technical issues (e.g., MMS interoperability) are resolved. It also begins the process of teaching consumers how to use these features on their phones.

With ALLTel’s decision to purchase Western Wireless and their 1.4 million subscribers, they will move from a distant sixth place with about 8.5 million subscribers to 10 million subscribers – a less distant sixth (not considering that the Nextel and Sprint deal has not closed) from fifth place T-mobile with more than 16 million subscribers. This acquisition will move ALLTel from a regional player to a “leading” regional player position, but certainly not a national player given that they lack coverage in key urban markets.

The Western Wireless acquisition is certainly a fit in terms of geography adding customers in mostly regions in which ALLTel does not compete today. Operating statistics such as MOU and ARPU are similar for both companies, but low in comparison to national providers. Neither company was working on a 3G network which would enable new services. ALLTel investors rather than consumers are likely to see the near term benefits of this transaction.